Collins Stewart Provides Color on Semiconductor Sector

Collins Stewart provided color on semiconductor sector ahead of Computex in Taiwan. In a research report published today, Collins Stewart states, "We are attending Computex this week in Taiwan. Following several days of meetings, we believe PC unit shipments continue to be on track for a ~10% q/q rebound following a return to normalized inventories and several quarters of disappointing results. Despite an uplift in units, end-demand for PCs remains tepid and 2H visibility is unclear. While enterprise PCs continue to remain strong, OEMs anticipate a return to more normalized enterprise PC growth rates at the end of 2012. Companies in our universe with meaningful PC exposure include DIOD (30%), DLB (33%), ONNN (30%), SYNA (54%), and VLTR (19%)." Diodes Incorporated DIOD has a price target of $35. The report states, "Risks to our price target include: 1) Falling lead times and order cancelations; 2) Double ordering; 3) Inventory correction; 4) Weakness in end-demand; 5) Market share loss; 6) Pricing pressures; 7) Supply chain disruption and shortages from the Japan earthquake." At the moment, Collins Stewart has a Buy rating on the company's stock. On Tuesday, Diodes added 0.17% to its value to close the day at $29.20. Dolby Laboratories DLB has a price target of $55. In the report, Collins Stewart states, "Risks to our price target include: 1) A slowdown in consumer spending; 2) Uncertainty related to the recovery of IT spending; 3) Greater than anticipated reduction by third-party ISV attach rates on PCs; 4) Inability to enforce patents; 5) Greater than expected production risks in Japan." At the moment, Collins Stewart has a Buy rating on the company's stock. On Tuesday, Dolby added 0.06% to its value to close the day at $46.74. ON Semiconductor Corporation ONNN has a price target of $13 set on its shares. The report states, "Risks to our price target include: 1) Falling lead times and order cancellations; 2) Double ordering; 3) Inventory correction; 4) Weakness in end-demand; 5) Market share loss; 6) Pricing pressures." At the moment, Collins Stewart has a Buy rating on the company's stock. On Tuesday, ON Semiconductor added 0.99% to its value to close the day at 11.22. Synaptics SYNA has a price target of $32 set on its shares. The report states, "Risks to our price target include: 1) A slowdown in demand for notebook PCs; 2) Competitive market share loss; 3) Lumpiness in the ramp of design wins; 4) Pricing pressure; 5) Degradation in ASPs from a shift in mix from modules to chips." At the moment, Collins Stewart has a Neutral rating on Synaptics. On Tuesday, Synaptics added 0.65% to its value to close the day at $28.05. Volterra Semiconductor Corporation VLTR has a price target of $33 set on its shares. The report states, "Risks to our price target include: 1) A slowdown in enterprise IT spending; 2) Share loss on Intel's next generation server and PC NB platforms; 3) An unfavorable court ruling in the company's litigation against Infineon Primarion." At the moment, Collins Stewart has a Buy rating on the company's stock. On Tuesday, Volterra added 0.69% to its value to finish the day at $24.67.